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INTERNATIONAL COMPARISON March 2018

What´s in this issue: Taxation on intellectual property Antea International Comparison is a quarterly publication that provides you an overview of trends and international tax developments by comparing tax issues in different legislations around the world, that may affect those doing business in multiple locations. Constant legislative, regulatory, and judicial changes, along with globalization, economic shifts, and operational adjustments, are challenging issues. Now more than ever, in an increasingly globalized world, companies must have a total perspective and awareness of tax issues, and this publication aims to cover key tax topics which should be of interest to businesses operating internationally. This edition includes numerous country focus pieces, in which it is analyzed; the tax issues on intellectual property divided in two types; traditional intellectual property and technology, internet and high-tech. We hope you that you find this publication helpful.

“The content of this newsletter has been written or gathered by Antea and its representatives, for informational purposes only. It is not intended to be and is not considered to be legal advice, nor as a proposal for any type of legal transaction. Legal advice of any nature should be sought from legal counsel. For further advice please contact local office.”


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Argentina

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Jordan

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Russian Federation

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Austria

Bulgaria

Cyprus

Egypt

Germany

Greece

Israel

Japan

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INTERNATIONAL COMPARISON. March 2018

Malta

Mexico

Paraguay

Portugal

Romania

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Belarus

more info

Intellectual Property Intellectual property is reserved for protecting creations of the mind in which the author’s personality is captured, and that are unique creations, not industrially manufactured or mass-produced. These creations can be literary and artistic works such as novels, poems and theatre plays, films, musical works, artworks, drawings, paintings, photographs and sculptures or architectural designs, as well as rules for games and computer programs. Industrial Property Exploitation of the right of use of Industrial Property. Creations related to industry: patents, drawings, models, plans, formulae, secret procedures, utility models, distinctive signs and designs.

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Singapore

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Spain

United Kingdom

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Argentina Intellectual Property Ownership

Taxes and benefits Income Tax

VAT

Owner other than the creator perceives income derived from the license with third parties. Progressive tax rate: from 5% to 35%. Author that keeps ownership licenses it to third parties. Exempted up to the sum of USD 500, only if the registration was complied at the National Directorate of Copyright and the person is an Argentine resident. In the case of payments to beneficiaries from abroad, the effective tax rate of 12.25% must be applied as a withholding tax (sole and final payment), only if the registration in the National Directorate of Copyright was complied. Otherwise, will apply a rate of 31.50%. Individual

Author, that keeps ownership attaches it to his/her business activity and exploits it. Exempted up to the sum of USD 500, only if the registration was complied at the National Directorate of Copyright and the person is an Argentine resident. In the case of payments to beneficiaries from abroad, the effective tax rate of 12.25% must be applied as a withholding tax (sole and final payment), only if the registration in the National Directorate of Copyright was complied. Otherwise, will apply a rate of 31.50%.

Exempt. (Except in the case that the company provides a taxable service vinculated with in an accessory way, in which case will apply a rate of21%).

Transmission of property. Exempted up to the sum of USD 500, only if the transferor is author or beneficiary and the registration was complied at the National Directorate of Copyright. For the rest of the cases, apply a progressive tax rate from 5 to 35%.

Company

Author, that keeps ownership licenses it to third parties. Tax rate: Exercises started on 2018-01-01 until 2019-12-31, 30%. Ex-ercises started 2020-01-01, 25%. In the case of payments to beneficiaries from abroad, the effective rate of 31.50% will be applied as a withholding tax.

INTERNATIONAL COMPARISON. March 2018

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Argentina Industrial Property Ownership

Taxes and benefits Income Tax

VAT

Owner perceives income derived from the license with third parties. Progressive tax rate: from 5% to 35%.

Individual

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. Progressive tax rate: from 5% to 35%. In the case of payments to beneficiaries from abroad, the effective tax rate of 28% must be applied as a withholding tax (sole and final payment), only if the registration was complied at the National Di-rectorate of Industry Property. Otherwise, will apply a rate of 31.50%. Transmission of property. Progressive tax rate: from 5% to 35%. Income Tax

Company

Author, that keeps ownership licenses it to third parties. Tax rate: Exercises started on 2018-01-01 until 2019-12-31, 30%. Ex-ercises started 2020-01-01, 25%. In the case of payments to beneficiaries from abroad, the effective tax rate of 28% must be applied as a withholding tax (sole and final payment), only if the registration was complied at the National Di-rectorate of Industry Property. Otherwise, will apply a rate of 31.50%.

Exempt. (Except in the case that the company provides a taxable service vinculated with in an accessory way, in which case will apply a rate of21%).

Transmission of property. Tax rate: Exercises started on 2018-01-01 until 2019-12-31, 30%. Ex-ercises started 2020-01-01, 25%.

INTERNATIONAL COMPARISON. March 2018

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Argentina Treatment of expenses for Intellectual and Industrial Property Licensee

Taxes and benefits Income Tax

Individual

Income Tax Company

The expense is deductible if it´s related to the revenue. In the case of trademarks and patents licensed by foreign residents, only up to 80% of the expenses paid for this concept will be deductible. If the local company has links with the subject licensee must present a transfer pricing study to determine if that 80% is deductible, or if it must be adjusted to the “Arm’s Length” value.

Acquirer

Company

There is no computable tax credit because it´s an exempt operation.

Taxes and benefits Income Tax

Individual

VAT

The expense is deductible if it´s related to the revenue. In case of trademarks and patents licensed by foreign residents, only up to 80% of the remuneration paid for this concept will be deductible.

The amortizations of keys and brands are not deductible since they do not represent rights with limited useful life. On the contrary, amortizations of patents are deductible because it is a right that is extinguished by the pass of time. The amortizations of keys and brands are not deductible since they do not represent rights with limited useful life. On the contrary, amortizations of patents are deductible because it is a right that is extinguished by the pass of time.

INTERNATIONAL COMPARISON. March 2018

VAT There is no computable tax credit because it´s an exempt operation.

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Austria Intellectual Property Ownership

Taxes and benefits Personal Income Tax

Individual

Author that keeps ownership attaches it to his/her business activity and ex-ploits it. OR Owner other than the creator perceives income derived from the license with third parties. OR Author that keeps ownership licenses it to third parties. If attached to business activity: Business income / tax rate: up to 50% If not attached to business activity: Income from rent / tax rate: up to 50% Transmission of property. Business income / tax rate: up to 50% Private income / tax free

Tax rate: 20% 10% on artistic work or literary work

Tax rate: 20%

Corporate Income Tax Company

VAT

VAT

Author, that keeps ownership licenses it to third parties. Business income / tax rate: 25%

Tax rate: 20%

Transmission of property. Business income / tax rate: 25%

Tax rate: 20%

Industrial Property Ownership

Taxes and benefits Personal Income Tax

Individual

Creator keeps ownership attaches it to his/her business activity and exploits it. OR Owner other than the creator perceives income derived from the license with third parties. OR Creator keeps ownership licenses it to third parties. If attached to business activity: Business income / tax rate: up to 50% If not attached to business activity: Income from rent / tax rate: up to 50%

INTERNATIONAL COMPARISON. March 2018

VAT

Tax rate: 20%

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Austria Individual

Company

Transmission of property. Business income / tax rate: up to 50% Tax benefit: reduced tax rate 50% of average tax rate BUT: only for inventions which are protected by patent right and only for its author

Tax rate: 20%

Corporate Income Tax

VAT

Author, that keeps ownership licenses it to third parties. Business income / tax rate: 25%

Tax rate: 20%

Transmission of property. Business income / tax rate: 25%

Tax rate: 20%

Tax deductibility of expenses relating to Intellectual and Industrial Property Licensee

Taxes and benefits Personal Income Tax

Individual

If located in Austria according to General Location Rules, deductible.

Deductible expense if related to revenue. Corporate Income Tax

Company

Taxes and benefits Personal Income Tax

Individual

Company

VAT If located in Austria according to General Location Rules, deductible.

Deductible expense if related to revenue.

Acquirer

VAT

It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Austria according to General Location Rules, deductible. VAT If located in Austria according to General Location Rules, deductible.

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Bulgaria Intellectual Property Ownership

Taxes and benefits Income Tax Owner other than the creator perceives income derived from the license with third parties. The owner has right to deduct from tax base before taxation 10% legally defined expenses / Tax rate: 10%

Individual

Company

VAT Tax rate: 20%

Author, that keeps ownership licenses it to third parties. The author has right to deduct from tax base before taxation 40% legally defined expenses / Tax rate: 10%

Tax rate: 20%

Author, that keeps ownership attaches it to his/her business activity and exploits it. The author has right to deduct from tax base before taxation 40% legally defined expenses / Tax rate: 10%

Tax rate: 20%

Transmission of property. Capital gain / Tax rate: 10%

Tax rate: 20%

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: 10%.

Tax rate: 20%

Industrial Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner perceives income derived from the license with third parties. The owner has right to deduct from tax base before taxation 10% legally defined expenses / Tax rate: 10%

Tax rate: 20%

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. The author has right to deduct from tax base before taxation 40% legally defined expenses / Tax rate: 10% Transmission of property. Capital gain /Tax rate: 10%

INTERNATIONAL COMPARISON. March 2018

Tax rate: 20%

Tax rate: 20%

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Bulgaria Corporate Income Tax Company

VAT

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: 10%.

Tax rate: 20%

Transmission of property. Business activity income / Tax rate: 10%

Tax rate: 20%

Common taxation to Intellectual and Industrial Property Licensee

Taxes and benefits Personal Income Tax

Individual

Deductible expenses from tax base in percentage legally defined. Corporate Income Tax

Company

There is no benefits - common taxation on tax base

VAT If located in Bulgaria according to General Location Rules, deductible. VAT If located in Bulgaria according to General Location Rules, deductible.

Taxes and benefits Personal Income Tax Individual

Deductible expenses from tax base in percentage legally defined. Corporate Income Tax

Company

There is no benefits - common taxation on tax base

INTERNATIONAL COMPARISON. March 2018

VAT If located in Bulgaria according to General Location Rules, deductible. VAT If located in Bulgaria according to General Location Rules, deductible.

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Cyprus Cyprus’ legislation does not distinguish between Intellectual Property and Industrial Property Ownership

Taxes and benefits Income Tax

VAT

Qualifying intangible assets refer to assets that were acquired, developed or exploited by a person in the course of his business (excluding intellectual property associated with marketing) and which pertains to research and development activities for which economic ownership exists. Specifically these assets are:

As a general rule only computer software is subject to the standard VAT rate of 19%.

Patents as defined in the Patents Law Computer Software Other IP assets that are non-obvious, novel and useful, where the person which utilizes them in further development of a business that does not generate annual gross revenues exceeding Euro 7.500.000 (or Euro 50.000.000 for a group of companies) and which should be certified by an appropriate authority either in Cyprus or abroad. Individuals • Utility models, intellectual property assets which provide protection to plants and generic and material, orphan drug designations and extensions of protections of patents, all of which Companies should be legally protected. It should be noted that rights used for the marketing of products and services such as business names, brands, trademarks, image rights etc. are not considered as qualifying intangible assets. • • •

However, each case needs to be examined separately, especially in relation to the third and fourth category of qualifying intangible assets

Qualifying profits (income) relates to the proportion of the total income which relates to the fraction of the qualifying expenditure as well as the uplift expenditure which was incurred for the qualifying intangible asset. Such income, for example, consists of royalties in connection with the use of the qualifying intangible asset, capital gains arising on the disposal of a qualifying intangible asset etc. The overall income refers to the total income arising on the qualifying intangible asset within a specific tax year reduced by the direct costs for generating this income. Qualifying expenditure for a qualifying intangible asset relates to the total research and development costs incurred in any tax year wholly and exclusively for the development, improvement or creation of qualifying intangible assets and where costs are directly related to the qualifying intangible assets; plus uplift expenditure of 30% Company

80% of the overall income as defined above is treated as a deductible expense. In the case of companies the taxable income is taxed under corporation tax at 12.5% (i.e. effective tax rate of 12.5%). For individuals the tax rate will depend on their total income (tax rates vary between 0% and 35%)

INTERNATIONAL COMPARISON. March 2018

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Egypt Taxable Revenues The Tax shall be imposed on: 1. Net revenues of free professions and other non-commercial professions exercised by the taxpayer independently, in which work constitutes the basic element, if these revenues result from exercising the profession or activity in Egypt; 2. Income obtained by intellectual property rights holders from the sale of or investment in their rights; 3. Any revenues resulting form any profession or activity non-prescribed in article-6 of the present law. Ownership

Taxes and benefits Personal Income Tax

VAT

Determination of Revenues Included In The Taxable Base The revenues included in the taxable base shall be determined annually on basis of the net revenues during the previous year. Revenues from non-commercial professions shall comprise the yields of disposing of any professional assets, and yields of transferring the know-how or relinquishing the profession exercise offices, wholly or partially, and any amounts collected as a result of closing down the office.

Tax rate: 10%

Determining the net revenues shall be on basis of the revenue resulting from the different transactions, according to the provisions of the present law, after deducting all costs and expenses necessary for exercising the profession including the deprecations of assets, which shall all be according to simplified accounting standards to be issued by decree of the minister. Individual

The following shall be considered among the deductible costs: 1. The registration fees, the annual contributions, and the fees for exercising the profession; 2. The taxes settled by the taxpayer in the course of exercising the profession, with the exception of the tax he pays according to the provisions of the present law; 3. The amounts settled by the taxpayer to his association according to its pensions scheme; 4. The premiums of life insurance and health insurance on the taxpayer in his own favor and in favor of his spouse and minor children. In applying the provisions of items (3 and 4), the total tax-exempted portion for the taxpayer from his/her net taxable revenue shall not exceed three thousand pounds annually. This deduction shall not be repeated from any other income prescribed in article (6) of the present law.

INTERNATIONAL COMPARISON. March 2018

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Egypt Donations that are granted or devolve to the government, the local government units, and the public juridical persons shall be deducted from the net revenues prescribed in article (32) of the present law, within and not exceeding the annual net revenue, as well as the donations and aids extended to the Egyptian non-governmental organizations registered according to the provisions of the laws organizing them, and to the educational establishments and hospitals that are subject to supervision by the government, as well as to the Egyptian scientific research institutions, providing this shall not exceed 10% of the annual net revenue. Individual

The same donations shall not be deducted from any other revenue of those prescribed in article-6 of the present law. All costs and expenses necessary for realizing the revenue shall be deducted from the total revenue of the taxpayer, based on the regular documentarily supported accounts, including the costs and expenses that are not customarily supported by documents, and as determined by the executive regulations of the present law. The deduction shall be at the rate of 10% in case of non-holding regular books. In applying the provisions of the present part, the provision of article-29 of the present law shall apply if the taxpayer holds regular books. The followins shall be exempted from the tax: 1. The educational establishments placed under the supervision of the government, the public juridical persons or the public sector or the public business sector. 2. Revenues from writing and translating religious, scientific, cultural and literary books and articles, with the exception of the revenues resulting from the sale or translation of the book for producing it in a visual or audio form.

Tax Exemptions

3. Revenues of members of the teaching staff in the universities, institutes and others as realized from their books and compilations which are primarily printed for distribution to the students according to the systems and prices to be set by the universities and institutes.

Tax rate: Zero%

4. Revenues of members of the plastic artists association from the production of works of photography, sculpture and carving arts. 5. Revenues of the free professionals that are registered as active members of trade unions in their field of specialization for a period of three years form the date of exercising the free profession. They shall not pay the said tax except from the beginning of the month following the lapse of the said exemption period to which is added the training

INTERNATIONAL COMPARISON. March 2018

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Germany Intellectual Property Ownership

Individual

Taxes and benefits Personal Income Tax*

VAT

Owner other than the creator perceives income derived from the license with third parties, as well as random inventions. Income from renting and leasing / Personal tax rate: Up to 45%

Tax rate: 7%

Author that keeps ownership licenses it to third parties. Income from self-employment / Personal tax rate: Up to 45%

Tax rate: 7%

Author, that keeps ownership attaches it to his/her business activity and exploits it. Income from commercial activity / Personal tax rate: Up to 45%, possible trade tax

Tax rate: 7%

Transmission of property. Capital gain has to be considered / Personal tax rate: Up to 45% Corporate Income Tax*

Company

Author that keeps ownership licenses it to third parties. Business activity income. Tax rate: about 30% incl. trade tax. Tax Benefit: No. Transmission of property. Business activity income / Tax rate: about 30% incl. trade tax.

Tax rate: 19% VAT Tax rate: 7%

Tax rate: 19%

*In the case of limited tax liability, the income tax is levied by means of tax deductions for income derived from the use or right to use rights.

INTERNATIONAL COMPARISON. March 2018

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Germany Industrial Property Ownership

Taxes and benefits Personal Income Tax*

VAT

Owner other than the creator perceives income derived from the license with third par- Tax rate: 7% if the right ties, as well as random inventions. holder grants the beIncome from renting and leasing / Personal tax rate: Up to 45% neficiary the economic exploitation of the work, otherwise 19% Individual

Author that keeps ownership licenses it to third parties. Income from self-employment / Personal tax rate: Up to 45%

Tax rate: 7% if the right holder grants the beneficiary the economic exploitation of the work, otherwise 19%

Author, that keeps ownership attaches it to his/her business activity and exploits it. Income from commercial activity / Personal tax rate: Up to 45%, possible trade tax

Tax rate: 7% if the right holder grants the beneficiary the economic exploitation of the work, otherwise 19%

Transmission of property. Capital gain has to be considered / Personal tax rate: Up to 45% Corporate Income Tax* Company

Author that keeps ownership licenses it to third parties. Business activity income. Tax rate: about 30% incl. trade tax. Tax Benefit: No. Transmission of property. Business activity income / Tax rate: about 30% incl. trade tax.

Tax rate: 19% VAT Tax rate: 7% if the right holder grants the beneficiary the economic exploitation of the work, otherwise 19% Tax rate: 19%

* In the case of limited tax liability, the income tax is levied by means of tax deductions for income derived from the use or right to use rights.

INTERNATIONAL COMPARISON. March 2018

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Germany Common taxation to Intellectual and Industrial Property Licensee

Taxes and benefits Personal Income Tax

Individual

In general deductible expense. Limited expenditure deduction regarding trade tax if applicable. However, expenses are limited if; • Creditor is subject to lower taxation (< 25%) • Creditor related to the debtor in the sense of the “AStG” Corporate Income Tax

Company

In general deductible expense regarding corporate tax. Limited expenditure deduction regarding trade tax. However, expenses are limited if; • Creditor is subject to lower taxation (< 25%) • Creditor related to the debtor in the sense of the “AStG”

VAT If located in Germany according to General Location Rules, deductible.

VAT If located in Germany according to General Location Rules, deductible.

Taxes and benefits Personal Income Tax Individual

Can only be depreciated if acquired. Corporate Income Tax

Company

Can only be depreciated if acquired.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Germany according to General Location Rules, deductible. VAT If located in Germany according to General Location Rules, deductible.

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Greece Intellectual Property Ownership Individual and Company Company

Taxes and benefits Personal Income Tax

VAT

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: 15%.

Tax rate: 15% Patents achieve protection by registration pursuant to Law No. 1733/1987 (the Patent Act). The requirements for a patent to be protected are that the invention must be new, original and capable of industrial application. Once granted, a patent will be protected for 20 years. Note that in Greece the concept of â&#x20AC;&#x2DC;enabling disclosureâ&#x20AC;&#x2122;, is more elastic than in other member states. An inventor may apply for EU registration but this would effectively create a number of national patents.

Industrial Property Ownership

Taxes and benefits Personal Income Tax

Individual and Company

Copyright Law Greek Copyright Law (2121/1993 as amended and now in force): comprises a non-exclusive list of works, i.e. literary (written or oral), dramatic, choreographies, pantomimes, musical, films and audiovisual works, photographs, artistic (fine art), architectural works, works of artistic craftmanship, illustrations, maps, three-dimensional works related to geography, topography, architecture or science. Computer programs and databases (the latter defined by law as collections of independent works, data, or other materials arranged in a systematic way and individually accessible by electronic or other means) are also protected as special categories of works.

Common taxation to Intellectual and Industrial Property Licensee Individual Company

Taxes and benefits Personal Income Tax Deductible expense if related to revenue. Corporate Income Tax Deductible expense if related to revenue.

Acquirer Individual Company

VAT If located in Greece according to General Location Rules, deductible. VAT If located in Greece according to General Location Rules, deductible. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Greece according to General Location Rules, deductible. VAT If located in Greece according to General Location Rules, deductible. www.antea-int.com

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Israel Intellectual Property Ownership

Taxes and benefits Personal Income Tax Creator that keeps ownership licenses it to third parties. Income from rental / Tax rate: Up to 50%

Individual

Creator that keeps ownership attaches it to his/her business activity and exploits it. Business activity income / Tax rate: Up to 50% Transmission of property: â&#x20AC;˘ Patent, a sample, or copyright: Tax rate: up to 40%. â&#x20AC;˘ All the rest: Capital gain / Tax rate: 25% Corporate Income Tax

Company

Creator that keeps ownership licenses it to third parties. Business activity income. Tax rate: 23%. Transmission of property: Business activity income or Capital gain /Tax rate: 23%

INTERNATIONAL COMPARISON. March 2018

VAT A random transaction of a commercial nature: VAT rate 17% VAT rate 17% VAT rate 17% Sale of an intangible asset to a foreign resident, under the conditions prescribed by law: VAT rate 0% VAT VAT rate 17% Sale of an intangible asset to a foreign resident, under the conditions prescribed by law: VAT rate 0%

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Israel Common taxation to Intellectual and Industrial Property Licensee

Taxes and benefits Personal Income Tax

Individual

Deductible expense if related to revenue. Corporate Income Tax

Company

Taxes and benefits Personal Income Tax

Individual

VAT

It can be depreciated if related to revenue. Transmission of property, excluding Patent, a sample, or copyright: Revenue from the sale by the inventor or the creator shall be allowed for If located in Israel according to General Location Rules, deductible. the deployment of the revenues. The deployment will take place retroactive up to 4 years before the year of sale, in accordance with the terms of the law. The expenses deployed under the mechanism deployment of revenues. Corporate Income Tax

Company

VAT If located in Israel according to General Location Rules, deductible.

Deductible expense if related to revenue.

Acquirer

VAT If located in Israel according to General Location Rules, deductible.

It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Israel according to General Location Rules, deductible.

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Japan Intellectual Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner other than the creator perceives income derived from the license with third parties. Business income if the owner developed the property as his/her business. Miscellaneous income if he/she developed the property and license it to 3rd parties not for business. In both cases tax rate is up to 55% when he/she receives the license income.

8% Japanese Consumption Tax (JCT) JCT is similar to VAT in nature. If he/she developed the property not for business, JCT received by him/her is a part of his/her taxable income and he/she does not pay JCT to tax authority.

Author, that keeps ownership licenses it to third parties. Business income if the owner developed the property as his/her business. Miscellaneous income if he/she developed the property and license it to 3rd parties not for business. In both cases tax rate is up to 55% when he/she receives the license income.

8% Japanese Consumption Tax (JCT) If he/she developed the property not for business JCT received by him/her is a part of his/her taxable income and he/she does not pay JCT to tax authority.

Author, that keeps ownership attaches it to his/her business activity and exploits it. Business income/ Tax rate: Up to 55% Transmission of property. Business income if the owner developed the property as his/her business. Miscellaneous income if he/she developed the property and licenses it to 3rd parties not for business./ Tax rate: In both cases up to 55% Company

Author, that keeps ownership licenses it to third parties. Normal taxable income./Tax rate 29.97%

INTERNATIONAL COMPARISON. March 2018

8% JCT

8% JCT

8% JCT

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Japan Industrial Property Ownership

Individual

Company

Taxes and benefits Personal Income Tax

VAT

Owner perceives income derived from the license with third parties. Business income if the owner developed the property as his/her business. Miscellaneous income if he/she developed the property and licenses it to 3rd parties not for business. In both cases tax rate is up to 55% when he/ she received the license income.

8% Japanese Consumption Tax (JCT) If he/she developed the property not for business JCT received by him/her is a part of his/her taxable income and he/she does not pay JCT.

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. Business income / Tax rate is up to 55%

8% JCT

Transmission of property. Business income if the owner developed the property as his/her business. Miscellaneous income if he/she developed the property and licenses it to 3rd parties not for business./ Tax rate: Up to 55%

8% JCT

Corporate Income Tax

VAT

Author, that keeps ownership licenses it to third parties. Business activity income. Normal taxable income./Tax rate 29.97%

8% JCT

Transmission of property. Normal taxable income./Tax rate 29.97%

8% JCT

INTERNATIONAL COMPARISON. March 2018

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Japan Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax

VAT

Deductible expense if related to revenue.

8% JCT

Corporate Income Tax Company

Deductible expense if related to revenue.

Acquirer Individual Company

VAT 8% JCT However in case the place of domicile of the seller or lessor is in overseas payment to them for the property is not subject to JCT. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT 8% JCT VAT 8% JCT

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Jordan Intellectual Property Ownership

Taxes and benefits Personal Income Tax

Individual

VAT

Individual have a personal exempted JOD 12K annually and family exempted JOD 12K the net amount after exemptions subject to the following percentage: First

JOD 10K

7%

Second

JOD 10K 14%

Tax rate: 16%

Any amount after the above subject to 20% Its depend on industry the net taxable income subject to the following rates: Company

Industrial Trade & services

14% 20%

Communications, Insurance and brokerage

24%

Banking

35%

INTERNATIONAL COMPARISON. March 2018

Tax rate: 16%

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Malta Intellectual Property Ownership

Individual

Taxes and benefits Personal Income Tax Owner other than the creator perceives income derived from the license with third parties. Tax rate: from 0% - 35%, depending on the income earned

Tax rate: 18%

Author, that keeps ownership licenses it to third parties. Tax rate: from 0% - 35%, depending on the income earned

Tax rate: 18%

Author, that keeps ownership attaches it to his/her business activity and exploits it. Business activity income / Tax rate: from 0% - 35%, depending on the income earned Transmission of property. Capital gain / Tax rate: from 0% - 35%, depending on the income earned Company

VAT

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: from 35%, but can be eligible to claim 6/7ths tax refund

Tax rate: 18%

Exempt Tax rate: 18%

Industrial Property Ownership

Taxes and benefits Personal Income Tax Owner perceives income derived from the license with third parties. Tax rate: from 0% - 35%, depending on the income earned

Individual

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. Business activity income / Tax rate: from 0% - 35%, depending on the income earned Transmission of property. Capital gain / Tax rate: from 0% - 35%, depending on the income earned

INTERNATIONAL COMPARISON. March 2018

VAT Tax rate: 18% Tax rate: 18%

Exempt

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Malta

Company

Corporate Income Tax

VAT

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: from 35%, but can be eligible to claim 6/7ths tax refund

Tax rate: 18%

Transmission of property. Business activity income / Tax rate: from 35%, but can be eligible to claim 6/7ths tax refund

Tax rate: 18%

Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax Deductible expense if related to revenue.

VAT If located in Malta according to General Location Rules, deductible.

Corporate Income Tax Company

Deductible expense if related to revenue.

Acquirer Individual

Company

VAT If located in Malta according to General Location Rules, deductible. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Malta according to General Location Rules, deductible. VAT If located in Malta according to General Location Rules, deductible.

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Mexico Intellectual Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner other than the creator perceives income derived from the license with third parties. Movable capital / Tax rate: 35%

Tax rate: 16%

Author, that keeps ownership attaches it to his/her business activity and exploits it. Business activity income / Tax rate: 35%, Exempt 32,000 usd

Tax rate: 16%

Transmission of property. Capital gain / Tax rate: 35%

Company

If it was attached to a business activity: VAT rate 16% If it was not attached to a business activity: Transfer Tax 16%

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: 30%.

Tax rate: 16%

Industrial Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner perceives income derived from the license with third parties. Movable capital / Tax rate: 35%

Tax rate: 16%

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. Business activity income / Tax rate: Up to 35%

Tax rate: 16%

Transmission of property. Capital gain /Tax rate: 35%

INTERNATIONAL COMPARISON. March 2018

If it was attached to a business activity: VAT rate 16% If it was not attached to a business activity: Transfer Tax 16%

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Mexico Corporate Income Tax Company

VAT

Author, that keeps ownership licenses it to third parties. Business activity income. Tax rate: 30%.

Tax rate: 16%

Transmission of property. Business activity income / Tax rate: 30%

Tax rate: 16%

Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax Deductible expense if related to revenue.

VAT If located in Mexico according to General Location Rules, deductible.

Corporate Income Tax Company

Deductible expense if related to revenue.

Acquirer Individual

Company

VAT If located in Mexico according to General Location Rules, deductible. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Mexico according to General Location Rules, deductible. VAT If located in Mexico according to General Location Rules, deductible.

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Paraguay Intellectual Property Property

Taxes and benefits Personal Income Tax

VAT

It covers literary and artistic works, such as novels, poems and In Paraguay there is no exclusive tax on inteplays, films, musical works, works of art, drawings, paintings, llectual property. However, there are fees for photographs and sculptures, architectural designs. each specific procedure that may occur within the process of registration of copyright or inteCopyright llectual property. and related The rights related to copyright are for performers. This is paid at the National Directorate of Interights llectual Property. The rights of producers of phonograms over their recordings The cost is for daily journals ranging from 1 and the rights of broadcasting organizations over their radio and dayâ&#x20AC;&#x2122;s wage to 300, cost per dayâ&#x20AC;&#x2122;s wage 13 EUR. television programs. In addition all procedures are done through lawyers who charge an additional fee.

INTERNATIONAL COMPARISON. March 2018

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Portugal Intellectual Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner other than the creator who receives income from the license to third parties. Movable capital/tax flat rate at 28% (or tax jointly by option)

Tax rate: 23%

Author, that keeps ownership and licenses it to third parties. Salary income / Tax rate: Up to 48%

Exempt

Author, that keeps ownership attaches it to his/her business activity and exploits it. Business activity income / Tax rate: Up to 48%

Exempt

Transmission of property. Capital gain / tax flat rate at 28% (or tax jointly by option)

Corporate Income Tax Company

Author that keeps ownership and licenses it to third parties. Business activity income / Tax rate: 21%.

INTERNATIONAL COMPARISON. March 2018

If it was attached to a business activity: VAT rate 23% If it was not attached to a business activity: Exempt VAT Tax rate: 23%

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Portugal Industrial Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner receives income derived from the license that invoices to third parties. Movable capital / tax flat rate at 28% (or tax jointly by option)

Tax rate: 23%

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. Business activity income / Tax rate: Up to 48%

Tax rate: 23%

Transmission of property. Capital gain / tax flat rate at 28% (or tax jointly by option)

Corporate Income Tax

Company

Author that keeps ownership and licenses it to third parties. Business activity income. Tax rate: 21%. Tax Benefit: Patent Box. 50% reduction of the net income resulting from the transfer or license to a third party that will use it to develop an economic activity. Transmission of property. Business activity income / Tax rate: 21%

INTERNATIONAL COMPARISON. March 2018

If it was attached to a business activity: VAT rate 23% If it was not attached to a business activity: Exempt VAT

Tax rate: 23%

Tax rate: 23%

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Portugal Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax Deductible expense if related to revenue.

VAT If located in Portugal according to General Location Rules, deductible.

Corporate Income Tax Company

Deductible expense if related to revenue.

Acquirer Individual

Company

VAT If located in Portugal according to General Location Rules, deductible. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Portugal according to General Location Rules, deductible. VAT If located in Portugal according to General Location Rules, deductible.

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Romania Intellectual Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner other than the creator perceives income derived from the license with third parties. Movable capital / Tax rate: 10% on taxable income

Tax rate: 19%

Author, that keeps ownership licenses it to third parties. If employee, Salary income / Tax rate: Up to 45% Otherwise, independent activity/Other incomes/Tax rate 10% on taxable income Author, that keeps ownership attaches it to his/her business activity and exploits it. If employee, Business activity income / Tax rate: Up to 45% Otherwise, independent activity/Other incomes/Tax rate 10% on taxable income Transmission of property. Capital gain / Tax rate: 10%

Company

Exempt

Exempt, if not VAT payer

If it was attached to a business activity: VAT rate 19%

Author, that keeps ownership licenses it to third parties. Tax rate: 1% on income (up to EUR 1,000,000 Business activity income / Tax rate: 1% on income or 16% on turnover) or 16% Corporate Profit Tax taxable profit

INTERNATIONAL COMPARISON. March 2018

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Romania Industrial Property Ownership

Taxes and benefits Personal Income Tax Owner perceives income derived from the license with third parties. Movable capital / Tax rate: 10% Otherwise, independent activity/Other incomes/Tax rate 10% on taxable income

Individual

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. If employee, Business activity income / Tax rate: Up to 45% Otherwise, independent activity/Other incomes/Tax rate 10% on taxable income Transmission of property. Capital gain /Tax rate: 10%

Corporate Income Tax Company

Author, that keeps ownership licenses it to third parties. Business activity income. Tax rate: 16% on taxable profit or 1% on income Transmission of property. Business activity income / Tax rate: 16% on taxable profit or 1% on income, depending by tax status of the company micro-enterprise or normal profit tax payer

INTERNATIONAL COMPARISON. March 2018

VAT Tax rate: 19%, if VAT registered

Tax rate: 19%

If it was attached to a business activity: VAT rate 19% If it was not attached to a business activity: Transfer Tax 10% VAT Tax rate: 19%

Tax rate: 19%

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Romania Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax

VAT

Deductible expense if related to revenue, 40% of incomes can be considered deductible

If located in Romania according to General Location Rules, deductible.

Corporate Income Tax Company

Deductible expense if related to revenue.

Acquirer Individual

Company

VAT If located in Romania according to General Location Rules, deductible. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Romania according to General Location Rules, deductible. VAT If located in Romania according to General Location Rules, deductible.

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Singapore Intellectual Property Ownership

Taxes and benefits Personal Income Tax

GST

Owner other than the creator perceives income derived from the license with third parties. Movable capital / Tax rate: 2-22% Individual

Author, that keeps ownership licenses it to third parties. Salary income / Tax rate: Up to 2-22%

Tax rate: 7% (If GST Registered)

Author, that keeps ownership attaches it to his/her business activity and exploits it. Business activity income / Tax rate: Up to 2-22%

Company

Tax rate: 7% (If GST Registered)

Tax rate: 7% (If GST Registered)

Transmission of property. Capital gain / Tax rate: NIL

If it was attached to a business activity: GST rate Tax rate: 7% (If GST Registered)

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: 17%.

Tax rate: Tax rate: 7% (If GST Registered)

Industrial Property Ownership

Taxes and benefits Personal Income Tax

Individual

Tax rate: 7% (If GST Registered)

A Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. Business activity income / Tax rate: Up to 2-22%

Tax rate: 7% (If GST Registered)

Transmission of property. Capital gain /Tax rate: NIL

If it was attached to a business activity: Tax rate: 7% (If GST Registered) Corporate Income Tax

Company

GST

Owner perceives income derived from the license with third parties. Movable capital / Tax rate: 2-22%

GST

Author, that keeps ownership licenses it to third parties. Business activity income. Tax rate: 17%.

Tax rate: 21%

Transmission of property. Business activity income / Tax rate: 17%

Tax rate: 21%

INTERNATIONAL COMPARISON. March 2018

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Singapore Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax Deductible expense if related to revenue.

GST If located in Singapore according to General Location Rules, deductible.

Corporate Income Tax Company

Deductible expense if related to revenue.

Acquirer Individual

Company

GST If located in Singapore according to General Location Rules, deductible. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

GST If located in Singapore according to General Location Rules, deductible. GST If located in Singapore according to General Location Rules, deductible.

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Spain Intellectual Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner other than the creator perceives income derived from the license with third parties. Movable capital / Tax rate: 19-21-23%

Tax rate: 21%

Author, that keeps ownership licenses it to third parties. Salary income / Tax rate: Up to 45%

Exempt

Author, that keeps ownership attaches it to his/her business activity and exploits it. Business activity income / Tax rate: Up to 45% Transmission of property. Capital gain / Tax rate: 19-21-23%

Company

Exempt If it was attached to a business activity: VAT rate 21% If it was not attached to a business activity: Transfer Tax 10%

Author, that keeps ownership licenses it to third parties. Business activity income / Tax rate: 25%.

Tax rate: 21%

Industrial Property Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner perceives income derived from the license with third parties. Movable capital / Tax rate: 19-21-23%

Tax rate: 21%

Author, that keeps ownership, attaches it to his/her business activity and exploits it or licenses it to a third party. Business activity income / Tax rate: Up to 45%

Tax rate: 21%

Transmission of property. Capital gain /Tax rate: 19-21-23%

INTERNATIONAL COMPARISON. March 2018

If it was attached to a business activity: VAT rate 21% If it was not attached to a business activity: Transfer Tax 10%

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Spain Corporate Income Tax

Company

VAT

Author, that keeps ownership licenses it to third parties. Business activity income. Tax rate: 25%. Tax Benefit: Patent Box. 60% reduction of the net income resulting from the transfer or license to a third party that will use it to develop an economic activity.

Tax rate: 21%

Transmission of property. Business activity income / Tax rate: 25%

Tax rate: 21%

Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax Deductible expense if related to revenue.

VAT If located in Spain according to General Location Rules, deductible.

Corporate Income Tax Company

Deductible expense if related to revenue.

Acquirer Individual

Company

VAT If located in Spain according to General Location Rules, deductible. Taxes and benefits

Personal Income Tax It can be depreciated if related to revenue. Corporate Income Tax It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

VAT If located in Spain according to General Location Rules, deductible. VAT If located in Spain according to General Location Rules, deductible.

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United Kingdom Intellectual Property Intellectual property (IP) is an intangible asset that is unique and has been created by a person. Typical creations can be literary and artistic works such as: novels, poems and theatre plays, films, musical works, artworks, drawings, paintings, photographs and sculptures or architectural designs. Intellectual Property that is created and held with a view to exploiting it for business purposes includes: patents/inventions, drawings, models, plans, formulae, secret procedures, utility models, distinctive signs and designs. Please see below the basic tax implications surrounding IP. Please note that only for businesses in which turnover is in excess of the VAT registration threshold (currently £85,000), will VAT be due. UK resident individuals Income Tax

VAT

VAT applies to supplies of services which includes the grant and assigRoyalties are subject to income tax. The tax rate will either be 20%, 40% or 45% denment of a right to use IP (e.g. a pending on the individual’s total level of income. The person making the royalty payment licence). withholds 20% of the royalty payment at source and the recipient claims a deduction agaThe current VAT rate is 20%. inst their tax liability. Author, that keeps ownership licenses it to third parties.

In some circumstances, individuals who receive fluctuating royalties are allowed to average their profits between 2 years which may save tax. VAT applies to supplies of services which includes the grant and assigWhere an individual exploits the IP through their sole trade or through a partnership the nment of a right to use IP (e.g. a cost of creating the IP will be treated as an intangible asset which is held by the individual/ licence). partners. The current VAT rate is 20%. Profits in respect of the trade will be subject to the usual tax rates i.e. either 20%, 40% or 45% depending on the individuals’ total level of income. Author, that keeps ownership attaches it to his/her business activity and exploits it.

To avoid transfer pricing adjustments, transactions between related parties should be valued on an arm’s length basis. Transmission of property. VAT applies to supplies of services Where IP has been disposed of a capital gain will occur which will be subject to capital gains which includes the surrender of a tax. The current rates are either 10% or 20% depending on the individual’s total income. right to use IP (e.g. a sale). The current VAT rate is 20%.

INTERNATIONAL COMPARISON. March 2018

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United Kingdom UK resident companies or companies that are trading through a UK branch Corporation Tax

VAT

VAT applies to supplies of services which includes the grant and assignment of a right to use Normally any income which is generated as a result of licensing the IP to third IP (e.g. a licence). parties will be subject to UK corporation tax, which at the time of writing is 19%, but is due to reduce to 17% from 1 April 2020. The current VAT rate is 20%. Worldwide profits arising from patented inventions (or even items which include at least one UK or EU patented invention) will be subject to a corporation However where a licence is granted to a busitax rate of 10% as opposed to the standard corporation rate. Since 1 July ness in another EU state, no VAT is chargeable 2016 the ‘Nexus’ fraction is applied to ensure the patent box relief is more as the supply is zero rated. The recipient will then effectively need to self assess for VAT unclosely linked to the R&D activities carried out by the company. der the ‘reverse charge’ provisions. Companies paying royalties will usually deduct 20% wihholding tax, however, when the licencee company is resident in the EU, the EU Directive will usually Similarly, where a licence is granted to a busiapply and the payment can be made gross as long as the conditions apply. ness outside the EU, no VAT is chargeable beOther rates of withholding tax could apply depending on the Double Tax Treacause it is outside the scope of VAT. ty. Author, that keeps ownership licenses it to third parties.

The costs associated to the creation of the IP will be capitalized as intangible assets under the UK accounting rules. Where these costs were incurred after 31 March 2002 the UK tax rules follow the accounting rules and hence a tax deduction will usually be available when the costs are amortised or impaired. Pre 31 March 2002 assets are subject to the old regime, whereby the costs are largely treated as capital assets and hence the amortization is not allowable. It is likely that when IP is disposed of it will be as part of the disposal of the company’s traWhere IP has been disposed of a chargeable gain will occur. de and assets and hence the transaction will be Where the IP was created after 31 March 2002, the gain will be calculated by deemed to be a ‘transfer of a going concern’ comparing the sales proceeds with the tax written down value which in most which is outside the scope of VAT. instances is the accounting net book value. The chargeable gain will be subject to corporation tax at the rate which is prevailing at the time. Transmission of property.

For IP created before 31 March 2002, capital gains principles apply meaning the company is subject to corporation tax on the gain.

INTERNATIONAL COMPARISON. March 2018

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Russian Federation Intellectual Property Intellectual rights shall be recognized for the results of intellectual activity and means of individualization equated to them (results of intellectual activity and means of individualization), which include an exclusive right that is a proprietary right; and, in cases provided for by the Russian Civil Code, also personal non-proprietary rights and other rights (droit de suite, right of access, and others). The results of intellectual activity and means equated to them of individualization of legal entities, goods, work, services, and enterprises that are granted legal protection (intellectual property) shall be as follows: works of science, literature, and art; computer programs; databases; performances; phonograms; broadcasting or diffusion of radio- or television transmissions via cable; inventions; utility models; industrial designs; selection attainments; topographies of integrated circuits; secrets of production (know-how); trade names; trademarks and service marks; appellations of origin; commercial names. The citizen or legal entity possessing the exclusive right to a result of intellectual activity or to means of individualization (the rightholder) shall have the right to use this result or this means at his discretion in any legitimate manner. Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner perceives income derived from the license with third parties. Other personal income / Tax rate: 13%

Not subject to VAT

Author, that keeps ownership licenses it to third parties. Other personal income / Tax rate: 13%

Not subject to VAT

Author, that keeps ownership attaches it to his/her business Tax rate: not subject to VAT if personal business activity and exploits it. is under simplified taxation regime or 18% unBusiness activity income / Tax rate: Up to 20% der standard taxation regime Transmission of IP property rights. Other personal income / Tax rate: 13%

Company

Company that keeps ownership (or has right to use) the IP licenses (or sublicenses) it to third parties. Business activity income / Tax rate: 20%.

INTERNATIONAL COMPARISON. March 2018

If it was attached to a business activity: not subject to VAT or 18% If it was not attached to a business activity: not subject to VAT Tax rate: 18%

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Russian Federation Common taxation to Intellectual and Industrial Property Licensee Individual

Company

Taxes and benefits Personal Income Tax

VAT

Deductible expense if related to individual business revenue.

No subject to VAT

Corporate Income Tax

VAT

Acquirer Individual

Company

Input VAT paid is deductible if expense related to revenue subject to VAT.

Deductible expense if related to revenue.

Taxes and benefits Personal Income Tax

VAT

It can be depreciated if related to individual business revenue.

No subject to VAT

Corporate Income Tax

VAT

It can be depreciated if related to revenue.

INTERNATIONAL COMPARISON. March 2018

Input VAT paid is deductible if expense related to revenue subject to VAT.

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Belarus Intellectual Property According to the Belarusian Civil Code, Intellectual Property (“IP”) comprises of intellectual activity results and means of individualization. The IP objects protected by the law: - works of science, literature, and art; software & databases; drawings, performances; phonograms; broadcasting or diffusion of radio- or television transmissions via cable; inventions; utility models; industrial designs; selection attainments; integrated circuits; trade and service marks and etc. An individual or a legal entity possessing the exclusive right to IP object is entitled to use this IP object in any manner as prescribed by the law, including setting a bans for using that IP object by any third person or entity.

Ownership

Individual

Taxes and benefits Personal Income Tax

VAT

Owner perceives income derived from the license with third parties. Other personal income / Tax rate: 13%

Exempt

Author, that keeps ownership licenses it to third parties. Other personal income / Tax rate: 13%

Exempt

Author, that keeps ownership attaches it to his/her business activity and exploits it. Business activity income / General taxation system: - Tax rate is 13%; simplified taxation – tax rate is 3% (if an individual has chosen to account for VAT) and 5% - without charging VAT.

General rule is that business income / revenue derived by an individual is subject to VAT if total income / revenue for 3 preceding month exceeds k40EUR equivalent. VAT exempt in case of individual entrepreneur applies simplified taxation (single tax paid on revenues on quarterly basis) without VAT. In all other cases, 20% VAT is charged on respective individual’ income.

Transmission of IP property rights. Other personal income / Tax rate: 13%

If related to business (i.e. derived by individual entrepreneur) – than exempt from VAT or taxed with 20% VAT (pls. see previous comments). If the income not qualifies for business income – then PIT of 13% flat rate is solely applied.

Company

Company that keeps ownership (or has right to use) the IP licenses (or sublicenses) it to third parties. Business activity income / Tax rate: 18%.

INTERNATIONAL COMPARISON. March 2018

Tax rate: 20 %

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Belarus Common taxation to Intellectual and Industrial Property Licensee Individual

Taxes and benefits Personal Income Tax

VAT

Deductible expense if related to individual business revenue Corporate Income Tax

VAT exempt VAT

Company

Tax deductible cost for CIT purposes if incurred for business Input VAT, if any, is generally deductible if the needs (there should be a direct link b/w costs incurred and purchase costs relate to a VATable transaction. profits/revenue generated)

Acquirer

Taxes and benefits

Individual

Company

Personal Income Tax

VAT

It can be depreciated if related to individual business revenue.

VAT exempt

Corporate Income Tax

VAT

Acquired IP represents tangible assets for a company from Input VAT, if any, is generally deductible if purchalocal accounting & tax perspective s. Cost incurred on IP pur- se costs relate to a VATable transaction. chase is depreciated for tax purposes if the transaction is for business needs of a particular taxpayer (company).

INTERNATIONAL COMPARISON. March 2018

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Antea International Comparison March 2018  

What´s in this issue: Taxation on intellectual property

Antea International Comparison March 2018  

What´s in this issue: Taxation on intellectual property